Small UK firms are turning away from costly and heavily regulated pension schemes and many are worried that pension costs will increase further, according to a new report.
The survey of over 460 firms, all with 250 or fewer employees, was conducted by the UK’s Association of Consulting Actuaries, and focused on company’s views on pension proposals. Although the larger firms have been making the headlines over pension scheme deficits and closures, small firms employ over 58% of the working population and generate over half of the UK’s business turnover. However, only one in six smaller firms provide any type of pension arrangement.
Those that do are changing their arrangements. Over 70% of defined benefit, or final salary schemes, are now closed to new members, while funding levels of these schemes are 69% on average.
Although only 17% of the firms questioned did not support the National Pension Savings Scheme (NPSS), 68% said that the Pension Commission’s reforms were too complex. Firms are most worried about the management time and costs of schemes in the future, the report added.